Correlation Between SS TECH and Naver
Can any of the company-specific risk be diversified away by investing in both SS TECH and Naver at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SS TECH and Naver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Naver, you can compare the effects of market volatilities on SS TECH and Naver and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SS TECH with a short position of Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Naver.
Diversification Opportunities for SS TECH and Naver
Excellent diversification
The 3 months correlation between 101490 and Naver is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver and SS TECH is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SS TECH are associated (or correlated) with Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of SS TECH i.e., SS TECH and Naver go up and down completely randomly.
Pair Corralation between SS TECH and Naver
Assuming the 90 days trading horizon SS TECH is expected to generate 4.16 times less return on investment than Naver. In addition to that, SS TECH is 1.99 times more volatile than Naver. It trades about 0.04 of its total potential returns per unit of risk. Naver is currently generating about 0.36 per unit of volatility. If you would invest 17,040,000 in Naver on August 29, 2024 and sell it today you would earn a total of 2,520,000 from holding Naver or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Naver
Performance |
| Timeline |
| SS TECH |
| Naver |
SS TECH and Naver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Naver
The main advantage of trading using opposite SS TECH and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Naver can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Naver will offset losses from the drop in Naver's long position.| SS TECH vs. Daou Data Corp | SS TECH vs. Busan Industrial Co | SS TECH vs. Busan Ind | SS TECH vs. Shinhan WTI Futures |
| Naver vs. Korea New Network | Naver vs. Busan Industrial Co | Naver vs. Busan Ind | Naver vs. Shinhan WTI Futures |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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